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Delineation of Geospatial Residential Real Estate Submarket Boundaries

Author/s: Tony Lockwood

Date Published: 1/01/2009

Published in: Volume 15 - 2009 Issue 1 (pages 17 - 35)

Abstract

The objective of this study was to develop and assess a methodology for deriving the geospatial dimensions of residential real estate submarkets. This was achieved through the analysis of marketplace behaviour with respect to the underlying dimensions of the residential real estate geography. Importantly, the methodology makes no prior assumptions about where the spatial boundaries might be as they were empirically derived from the data alone. The contribution made lies in the use of the principal components of the underlying real estate geography as linearly independent variables in a geographically weighted hedonic model. This allows changing patterns in the parameter estimates of the principal components to define the geospatial submarket boundaries.

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